Equity Market Sheds 1.39% as CBN’s Interest Rate Hike Dampens Mood

February 28, 2024
equity market size

By Dipo Olowookere

The decision of the Central Bank of Nigeria (CBN) to hike the Monetary Policy Rate (MPR) by 4.00 per cent to 22.75 per cent to curb rising inflation on Tuesday suppressed the Nigerian Exchange (NGX) Limited by 1.39 per cent.

The action forced investors to liquidate their equities during the session for instruments in the money markets, which are anticipated to give higher yields than stocks.

The bourse witnessed sell-offs across the sectors during the session, with the banking space losing 3.35 per cent, and the insurance counter depreciating by 2.19 per cent.

Further, the consumer goods index went down by 0.17 per cent, and the industrial goods space declined by 0.05 per cent, while the energy sector closed flat.

Consequently, the All-Share Index (ASI) shrank by 1,412.64 points to close at 100,582.89 points compared with the preceding day’s 101,995.53 points, and the market capitalisation decreased by N773 billion to finish at N55.038 trillion versus Monday’s closing value of N55.811 trillion.

Investor sentiment was very weak yesterday after the exchange ended with 10 price gainers and 27 price losers, implying a negative market breadth index.

The duo of FBN Holdings and Multiverse retreated by 10.00 per cent each to N30.60 and N15.30, respectively, as MTN Nigeria lost 9.94 per cent to trade at N222.90, McNichols fell by 9.79 per cent to N1.29, and Consolidated Hallmark slipped by 9.63 per cent to N1.22.

On the flip side, Africa Prudential gained 9.86 per cent to quote at N7.80, Omatek also appreciated by 9.86 per cent to settle at 78 Kobo, Juli grew by 9.73 per cent to N2.82, Tantalizers expanded by 8.11 per cent to 40 Kobo, and Ellah Lakes surged by 8.07 per cent to N3.08.

Business Post reports that 280.5 million shares worth N6.1 billion were traded in 9,141 deals during the trading day compared with the 294.3 million shares worth N6.7 billion traded in 9,957 deals on Monday, indicating a decline in the trading volume, value, and the number of deals by 4.69 per cent, 8.96 per cent, and 8.20 per cent, respectively.

The most active stock for the session was Transcorp, which sold 44.4 million units valued at N583.5 million, trailed by Access Holdings, which transacted 30.6 million units for N600.6 million. UBA traded 26.5 million units worth N611.2 million, Zenith Bank exchanged 25.0 million units valued at N874.6 million, and NASCON traded 13.8 million units worth N893.7 million.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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